General
Publications & Data
Join the conversation
Social Links
Social Links
This report covers the key domestic and international data releases over the past week. The more comprehensive BER Weekly Review (Enhanced Version) includes a detailed discussion on the main economic events and developments over the past week, a summary of upcoming data (the week ahead) and the BER’s forecast for key economic indicators. The full Weekly is only available to BER Essential Insights subscribers (sign up here – it’s only R210/month and you get more benefits) and BER Premium Insights clients.
Following two consecutive rate cuts, the SA Reserve Bank (SARB) opted to keep the repo rate on hold at 7% in September (prime at 10.5%). The decision was in line with our expectations. Ahead of the forecast, the consensus saw one out of every three of analysts expecting a rate cut, with the rest (including the BER) seeing rates on hold. In the end, the decision by the monetary policy committee members reflected the same split, with two members preferring a cut and four opting for an unchanged interest rate.
On Monday, the BER published the inflation expectations survey (press release available here). Against the backdrop of the SARB’s announcement of a shift in the preferred inflation target at the end of the forecast horizon, long-term inflation expectations fell across all groups. On average, expectations for the next five years were down to 4.2% (from 4.4%), the lowest on record since 2011. Analysts and trade union officials revised expectations down to 3.6% and 4.3% respectively, while business expectations remained broadly unchanged at 4.5%. Near-term expectations also eased: average headline inflation was seen at 3.8% in 2025 and 4.2% in 2026 (both 0.1%pts lower than before). By contrast, household expectations for the year ahead remain sticky and elevated, unchanged at 5.5%, while long-term household expectations averaged a much higher 8.9% over the next five years (up from 8.5%).
Realised headline consumer inflation itself slowed to 3.3% y-o-y in August, from 3.5% in July, with prices falling 0.1% m-o-m. The main drivers were housing and utilities (up 4.3%, +1%pts) and food and non-alcoholic beverages (up 5.2%, 0.9%pts). Core CPI (excluding food, non-alcoholic beverages, fuel and energy) edged up marginally from 3.0% to 3.1% y-o-y.
High-frequency data from Stats SA provided insight into July activity in the tertiary sector. Retail trade sales rose 5.6% y-o-y in real terms (2.1% m-o-m, seasonally adjusted), accelerating from 1.7% y-o-y (-0.1% m-o-m) in June. Gains were broad-based, with textiles, clothing, footwear and leather goods up 10% (contributing 1.7 %pts). Other key contributors included general dealers (3.3%, +1.4 %pts), ‘other’ retailers (11.9%, +1.2 %pts), and hardware, paint and glass (up 13.2%, +1%pt).
Motor trade sales were strong this month, up 3% y-o-y in July (from 3.3% in June) and 0.7% m-o-m. Both new and used vehicle sales were strong, up 11.2% (+2.8%pts) and 6.1% (+1.3%pts), but fuel sales were the biggest drag (-6.4%, -1.7%pts).
Wholesale trade sales fell 0.3% y-o-y in July (from 1.0% in June). However, positive for GDP, in m-o-m terms, real seasonally adjusted sales were up 0.5%, a moderation from the 0.8% increase recorded in June.
As widely expected, the US Federal Reserve (Fed) lowered the federal funds rate target range by 25 bps to 4% - 4.25%. Fed Chair Jerome Powell maintained there was a “shift in the balance of risk” as the committee shifts focus to employment over inflation concerns.
Notably, the Fed expects further cuts in the current year and in the outer years. The dot plot shows that most members expect two more 25bps rate cuts for the current year. Meanwhile, one member took an increasingly dovish stance and another a more hawkish stance, suggesting uncertainty in terms of the rate path. However, the Fed maintained that policy decisions will remain data-dependent and will be assessed on a meeting-by-meeting basis. Interestingly, the Fed cut rates amid a better unemployment forecast and higher inflation projections.
Still in the US, retail trade sales showed that consumer spending remained resilient despite slowing job growth. Retail trade sales ticked up by 0.6% m-o-m in August, unchanged from an upwardly revised 0.6% in July. The largest increases were recorded in non-store retailers (2%), clothing stores (+1%) and sporting goods stores (+0.8%).
The Bank of England (BoE) voted to keep the bank rate unchanged at 4%, which was in line with market expectations. Seven of the nine members decided to keep rates steady, while the remaining members voted for a 25bps cut. The central bank maintains that underlying disinflation has continued; however, headline CPI is still elevated and expected to slightly advance in September owing to salient items such as food prices. As a result, upside risks to inflation remain in the medium term amid potential second-round effects.
Additionally, the committee voted to slow down the pace at which they reduce the stock of UK government bond purchases to £70 billion over the next 12 months (from £100bn). They also admitted that the reduction could have a greater impact on market functioning than previously thought, given the high yields on long-term government debt. Overall, the BoE maintained its “gradual and careful approach” and reiterated its focus on reducing inflation persistence to reach its 2% target in the medium run.
The MPC’s decision to keep rates unchanged followed CPI remaining sticky at 3.8% y-o-y in August, unchanged from July. Meanwhile, CPI services, which are closely watched by the BoE, slowed from 5% to 4.7% in August. Core CPI rose by 3.6%, down from 3.8% in July.
In the Eurozone, headline consumer inflation was 2% y-o-y in August, lower than the 2.1% flash estimate for July. Lower-than-expected energy prices pushed back the final reading to 2%.
Finally, the ZEW economic sentiment indicator in Germany rose marginally to 37.3 points in September from 34.7 in August, well above market expectations. Sentiment seems to have stabilised following a slump in the previous month.
According to the National Bureau of Statistics, China’s industrial production increased by a lower-than-expected 5.2% y-o-y in August, slowing from 5.7% y-o-y in July. This reading registered the slowest pace of growth since August 2024. Similarly, retail sales grew by 3.4% y-o-y in August, down from 3.7% in July. The below-consensus print reflects weak domestic demand following disappointing CPI data. Overall, China’s economy remains resilient amid weak domestic demand and the strain caused by US tariffs
Friday, 19 Sep 2025
